10 Common Mistakes to Avoid When Starting an Online Business



Starting an online business? Enhance your shot at success, try and avoid these 10 common business startup mistakes when starting an online business.

Mistakes made can be our greatest teacher, so the best startup advice comes from the first-hand knowledge of what not to do. We spoke to some business owners who shared their hard-earned experience and the insight they gained from their own lapses in judgment.



10 Common Mistakes to Avoid When Starting an Online Business

If you’re looking to get your business off the ground, consider these following pitfalls.

The 10 What Not To Do’s When Starting Your New Business



Single Founder

Have you ever noticed how few successful business startups were founded byjust one person? Even companies you think of as having one founder,like Oracle, usually turn out to have more. It seems unlikely thisis a coincidence.

What’s wrong with having one founder? To start with, it’s a voteof no confidence. It probably means the founder couldn’t talk anyof his friends into starting the company with him. That’s prettyalarming, because his friends are the ones who know him best.

But even if the founder’s friends were all wrong and the companyis a good bet, he’s still at a disadvantage. Starting a business startupis too hard for one person. Even if you could do all the workyourself, you need colleagues to brainstorm with, to talk you outof stupid decisions, and to cheer you up when things go wrong.



The last one might be the most important. The low points in astartup are so low that few could bear them alone. When you havemultiple founders, esprit de corps binds them together in a waythat seems to violate conservation laws. Each thinks “I can’t letmy friends down.” This is one of the most powerful forces in humannature, and it’s missing when there’s just one founder.

Not Anticipating Your Customers’ Potential Needs

If you decided to open up a cake business, did you even consider that a good number of your future customers will also need to have the goods delivered to them as well?



Many businesses entail additional needs aside from their core product or service. If you can’t provide this yourself, coordinate with a third party to make your respective services a seamless package for yourclients.
Taking the time to plan ahead will add to customer satisfaction and avoid headaches before they happen.

Not Having A Unique Selling Point

Surprisingly, an alarming number of new business owners ignore thispiece of business startup advice. Everything starts with a vague idea, but youwon’t get far if you haven’t refined exactly what you want your business to do.
To help you with this, think of the top three problems that yourproduct or service solves. Being very specific about these fundamentalgoals adds clarity to your business goals and focuses your limitedresources in the right direction.



Starting Without An Online Presence

This one here could be the #1 business startup mistake moving forward in the future of business. Nearly every company out there nowadays have some sort of anonline presence whether it be a Facebook page, Twitter account, websiteor domain name & e-mail. If you have none of the before mentionedthen you have made it incredibly hard to be found by the rest of theworld.

We are in the age of silicon business, where most people shop online, google for company contacts and e-mail instead of picking up the phone. If you have not even considered being part of the online world, youwill be left behind as most competition understands that the eye ballshave shifted from hard copy Yellow Pages to search engines and mobileinternet access.

Even if you have drummed up enough interest in your startup, you also need to be prepared when word gets around and people beyond yournetwork start looking you up online.

Confusing “blog” with “business”

Repeat after me: a blog isn’t a business. A blog isn’t a business.

A blog is an incredible platform for sharing your ideas, connectingwith people and growing an audience. The same is true of podcasting,YouTubing, or any other place you might publish content for free.

Giving away free content isn’t a business. It’s a tool for building influence. Don’t count on turning that influence into sponsorship’s or advertisingdollars. You’ll need a more direct plan for earning an income if youwant your blog or podcast to pay off. But You could turn your blog into a business startup place and make money from your blog.

Not worrying about money

Be optimistic –just not about money. “There’s a very good chance that your company will run out of money before it makes any,” cautions Tobak. “Know how muchcash you’ve got to run your startup business, what your burn rate is and makesure that you have a plan to try to get more before you run out.”
Too often business owners scramble to raise funds when it’s already toolate. Instead, founders from the get-go should create a financial plan,detailing milestones and how much money it will take to reach thesegoals.

Not worrying about money

Be optimistic –just not about money. “There’s a very good chance that your company will run out of money before it makes any,” cautions Tobak. “Know how muchcash you’ve got to run your business, what your burn rate is and makesure that you have a plan to try to get more before you run out.”
Too often business owners scramble to raise funds when it’s already toolate. Instead, founders from the get-go should create a financial plan,detailing milestones and how much money it will take to reach thesegoals.

Going it alone

The only reason my business exists today is becauseother entrepreneur friends wouldn’t let me quit. Seriously, I tried tothrow in the towel and start over with something else, but they wouldn’t let me. They talked me out of it.

No one can succeed in business alone. You need people to make itwork. Your customers are people, your suppliers are people, your service providers are people.

Most importantly, you need support from other entrepreneurs who areat similar stages as you are, and from others with more experience.
The more connected you become with other entrepreneurs, the morenormal your quest becomes. You’ll no longer feel crazy or alone, andyou’ll realize that we all face obstacles just like you’re facing.

The entrepreneurs who talked me out of quitting were part of a little group that met weekly to hold each other accountable. It didn’t costany of us a thing, other than an hour of our time each week, but itturned out to be the most valuable resource I ever used in my business.

Reach out to another entrepreneur or two, and ask them to meetweekly. Share your struggles and goals, and review your progress eachweek. This simple process is so powerful.

Choosing the Wrong Platform

A related problem (since it tends to be done by bad programmers)is choosing the wrong platform. For example, I think a lot ofstartups during the Bubble killed themselves by deciding to buildserver-based applications on Windows. Hotmail was still runningon FreeBSD for years after Microsoft bought it, presumably becauseWindows couldn’t handle the load. If Hotmail’s foundershad chosen to use Windows, they would have been swamped.

PayPal only just dodged this bullet. After they merged with X.com,the new CEO wanted to switch to Windows—even after PayPal cofounderMax Levchin showed that their software scaled only 1% as well onWindows as Unix. Fortunately for PayPal they switched CEOs instead.

Platform is a vague word. It could mean an operating system, or aprogramming language, or a “framework” built on top of a programminglanguage. It implies something that both supports and limits, likethe foundation of a house.

The scary thing about platforms is that there are always some thatseem to outsiders to be fine, responsible choices and yet, likeWindows in the 90s, will destroy you if you choose them. Javaapplets were probably the most spectacular example. This wassupposed to be the new way of delivering applications. Presumablyit killed just about 100% of the startups who believed that.

How do you pick the right platforms? The usual way is to hire goodprogrammers and let them choose. But there is a trick you coulduse if you’re not a programmer: visit a top computer sciencedepartment and see what they use in research projects.

Fights Between Founders

Fights between founders are surprisingly common. About 20% of thestartups we’ve funded have had a founder leave. It happens so oftenthat we’ve reversed our attitude to vesting. We still don’t requireit, but now we advise founders to vest so there will be an orderlyway for people to quit.

A founder leaving doesn’t necessarily kill a startup, though. Plentyof successful startups have had that happen.Fortunately it’susually the least committed founder who leaves. If there are threefounders and one who was lukewarm leaves, big deal. If you havetwo and one leaves, or a guy with critical technical skills leaves,that’s more of a problem. But even that is survivable. Bloggergot down to one person, and they bounced back.

Most of the disputes I’ve seen between founders could have beenavoided if they’d been more careful about who they started a companywith. Most disputes are not due to the situation but the people.Which means they’re inevitable. And most founders who’ve beenburned by such disputes probably had misgivings, which they suppressed,when they started the company. Don’t suppress misgivings. It’smuch easier to fix problems before the company is started thanafter. So don’t include your housemate in your startup becausehe’d feel left out otherwise. Don’t start a company with someoneyou dislike because they have some skill you need and you worry youwon’t find anyone else. The people are the most important ingredientin a startup, so don’t compromise there. 

Notes

This is not a complete list of the causes of failure,just those you can control. There are also several you can’t,notably ineptitude and bad luck. You should take more than you think you’ll need, maybe 50% to100% more, because software takes longer to write and deals longerto close than you expect.

Many more than most people realize, because companies don’t advertisethis. Did you know Apple originally had three founders?

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